Miguel Tejada was a star player – slugging shortstop, former All-Star and MVP – when he became a free agent at the age of “27” (actually 29) after the 2003 baseball season. He was one of the Oakland A’s best players, but they couldn’t afford his contract demands. The Mariners and Tigers where both interested in Tejada, but the Orioles were able to lock him up with a 6 year, $72 M contract. Some people questioned the price-tag, but in retrospect it was a very fine deal.

In his first season in an O’s uniform, Tejada led the league with 150 RBI and hit .311/.360/.534. The following year he topped the league with 50 doubles, batting .304/.349/.515. In 2006 he made a run at a batting title, finishing fourth with a .330/.379/.489 line. The constant losing wore on Tejada though, and trade rumors swirled around him. In ’07, his consecutive games streak – the fifth longest in MLB history – ended at 1,152 with a wrist injury that send him to the DL. After the rough season, in which his offense fell off to .296/.357/.442 (the first time since 1999 that he finished with an OPS under .800), Tejada was traded to the Houston Astros for Luke Scott, Matt Albers, Dennis Sarfate, Troy Patton, and Mike Costanzo. He had played in Baltimore for 4 years, out of the 6 that were originally expected.

The huge contract turned out to be a massive bargain though. In ’05 Tejada made just $7 M ($3 M in base salary and $4 M as a signing bonus – thanks Cot’s!), but his career year of 6.8 Wins Above Replacement was worth $21.1 M according to FanGraphs. In ’06 he was paid $11 M and was worth $16.1 (4.7 WAR). In ’07 he was again underpaid; $12 M in salary to $19.6 M (5.3 WAR) in production. It was only in his final year – largely due to the missed time – that Tejada didn’t pay for himself, making $12 M and being worth only $9.3 M (2.3 WAR). Overall, the O’s got a deal to the tune of over $24 M ($42 M in salary vs. $66.1 M in value). [I’m assuming that the ‘Stros picked up the two bonus payments of $2 M each that Tejada is due in 2010 and 2011.]

The Orioles were then able to get out from under the last two years of the contract, which paid Tejada $30 M for what turned out to be $25.6 M in production, by acquiring other assets (players) from Houston without having to pick up any of the tab on Miggy’s deal. In his two years as an Oriole, Scott has been paid $2.8 M for $15.5 M in value (+$12.7 M); Albers is at +$3.4 M ($0.8 M in salary, $4.2 M in production); and Sarfate is at -$0.4 M ($0.8 M in salary, $0.4 M in production). That’s another $15.7 M added on top of the original $24 M, for a total of $39.7 M in excess value to the team as a result of signing (and trading) Miggy. And that doesn’t count the extra value produced by Scott/Albers/Sarfate/Patton going forward (yes, I know I left Costanzo off), including if Scott is traded at some point himself.

Though, I think it would be fair to add, the O’s did have to give up a draft-pick to the A’s as compensation. Originally I had thought that Oakland used that pick to select Huston Street, but they actually took pitcher Michael Rogers, who never made it to the big leagues. (Street was taken with a compensation pick, but in the supplemental round and not with the actual pick the Orioles gave up.) The O’s could have potentially chosen Hunter Pence or Dustin Pedroia in that spot, but chances are their pick wouldn’t have paid off otherwise. So the count still stands at almost $40 M.

That’s not accounting, of course, for the opportunity costs associated with the move, such as not signing Vlad Guerrero in that 2003-2004 off-season instead which, assuming the same contract he actually got and including his $15 M option that was picked up this past season, would have cost the team about $7 M ($93.5 M paid vs. $86.2 M in production). Looking back at all of the big-name free agents from that time (guys signed for at least four years), Tejada turned out to be the biggest bargain. Incidentally, signing Javy Lopez to a 3 year, $22.5 M deal at that time didn’t turn out too badly. During his time with the O’s, Lopez actually produced about $22.5 M in value (from FanGraphs, which I should note doesn’t account for catcher defense). It just so happened that almost all his success came in his great first year, when he hit .316/.370/.503 with 23 home runs. Then he fell off a cliff pretty quickly, and retired after that contract expired.

So in conclusion, sometimes signing a top free agent is a good deal and sometimes it isn’t – it largely depends on the price. Groundbreaking analysis, I know.